No Runny Eggs

The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

Archive for September 23rd, 2008

Drill Here, Drill Now Tuesdays – 9/23/2008

by @ 18:23. Filed under Energy.

This idea was started by Jessi at Wake Up America. It will appear here every Tuesday (whether I’m here or not; the only difference is I won’t be able to update the current gas price while on vacation) until Congress wakes up and allows a lot more domestic drilling (I’m not talking about just ANWR, or just off the Florida coast where Cuba, Red China and Brazil are preparing to drink our milkshake, or just the shale fields in the Rockies).

My Gas Price (south suburban Milwaukee County, Wisconsin): $3.759/gallon

America needs to drill here drill now. America is having a energy crisis, and we need to do something now!

The United States has vast oil and gas resources onshore and offshore that are currently illegal to develop and therefore inaccessible.

U.S. law prohibits the development of approximately 38 billion barrels of undeveloped oil resources (19 billion barrels onshore and 18.92 billion offshore).

U.S. law prohibits the development of approximately 180 trillion cubic feet of undeveloped natural gas resources (94.5 trillion cubic feet onshore and 85.7 trillion cubic feet offshore).

Also…

CONGRESS RECENTLY VOTED TO MAKE IT ILLEGAL TO DEVELOP U.S. OIL SHALE RESOURCES

With oil prices at an all-time high, Americans are facing escalating gas, diesel, and aircraft fuel increases. Oil prices are projected to increase further.

Congress, however, has made it illegal to develop vast domestic oil resources in large parts of the United States.

The most startling Congressional prohibition on domestic oil production concerns the recently enacted ban on the development of oil shale resources in parts of Colorado, Utah, and Wyoming in the Green River Formation. According to a Rand Study estimate, this reserve contains over one trillion barrels of oil, with 800 billion barrels fully recoverable, or three times the current oil reserves as Saudi Arabia.

There, however, is some good news. There is very-late word that the House Democrats will not attempt to attach their no-drill bill making the easiest-to-exploit portions of America’s energy resources permanently inaccessible to the continuing resolution. Thus, the ban on the offshore drilling portion of the various roadblocks toward energy independence will be lifted next week Wednesday. While I have no doubt the Democrats will try again next year to ensure a perpetual energy crunch if they are left in power, and while this doesn’t directly address the lock-ups on on-shore oil and natural gas, clean coal, and oil shale, I’ll take this victory.

This is Laughable!

by @ 11:46. Filed under Miscellaneous.

From “The News Agency Who Shall Not be Named,” this headline:

Iranian president blames US for market collapse

Oh yeah!

Foreign governments buying US debt like Chiclets because it was the “safest” bet going were not enablers!

All those countries taking in every dollar they could as oil moved above $140/barrel, no, they had nothing to do with the world economic issues either!

I’m beginning to think that Nancy Pelosi, Chris Dodd and Chuck Schumer are all Iranian. The only thing I hear coming out of any of their mouths has nothing to do with solving a problem or anticipating one. The only thing out of their mouths is a politicization of every issue with a one word explanation: “Buuuuuuuush!”

To all of you in DC, grow up or find another line of work. I don’t tolerate the constant blame game from Thing 1 and Thing 2, why is it acceptable from you?

Roman History and the Paulson Bailout Plan

After initial euphoria, the stock exchanges took back all of Friday’s gains as more details were released and Congressional wrangling began, regarding the Paulson bailout plan.

Paulson is proposing a $700B plan to take all of the “bad loans” off of banks books and manage the disposition of those loans over a 2 to 4 year period.  

Several articles have described the Paulson’s plan as “letting those responsible for this debacle, off the hook.”   In a sense that may be true, to the extent that companies holding these bad loans survive and avoid bankruptcy.   In another sense, it’s hard to say that companies who have written off up to 80% of assets that surely have greater value than that, have been “let off the hook.” (Don’t get me started on the mark to market requirements!)  

It’s hard to tell if Paulson’s plan, in any form, will make it through Congress.   While there was a large sigh of relief last week when the plan was rumored and initially announced, several factions have inserted themselves in the process or the lobbying and may ultimately kill any chance for a bill.

The Dems are trying to ensure that they get a piece of flesh by adding a provision that any institution who sells these loans to Paulson (I’ll use that term as generic for his plan because I don’t know what else to call it)  or buys them, has to provide stock warrants to Paulson that would allow Paulson to cash them in and benefit from any gain that the companies may later have.   As an aside, this ain’t going to fly.   Can you imagine anyone willing to buy distressed assets if they have to also give stock warrants?   They also want to control salaries and bonuses of senior executives of the impacted companies…Oh yeah, that will get a lot of folks lining up at Paulson’s door!   While Dems may possibly cause derailing from the inside of the process, some Republicans, especially those who would brand themselves “hard core conservatives” are trying to derail the bill from outside.

HotAir.com  has an article outlining opposition to Paulson’s plan by Rep. Mike Spence and William Kristol. Over at Redstate.com a conservative blog site, some readers are lining up their opposition to the bill.

I honestly don’t know whether the Paulson plan is the right one or not. You could say it’s above my pay grade. While I’m not big on bailouts, I do believe the Bear Stearns move was the right one. AIG, I’m just not familiar enough with the issues. Here’s what I do know. In the current discussion, the Dems are playing politics and some of the Conservatives, blasting this plan with as little information as the rest of us have, are ideologues.

I saw this article today in US News and World Report. In it, the author makes a swag at the possible implication if the Paulson plan is derailed. His numbers are staggering! According to his swag, the impact on the US economy could be north of $30 trillion. Remember, the US economy is about $12 Trillion. Can you imagine an impact that is 2.5X today’s economy.   Is he right?   Again, I don’t know.   But, even if you cut his numbers in half, the potential is beyond significant.   At the very least, those who are working hard to flush this plan without serious discussion, ought to spend some time considering the articles arguments.

What’s the tie to Roman History?

In 280 B.C. and again in 279 B.C. King Pyrrhus of Epirus took on the Roman army. The good news is that Pyrrhus won both battles against the larger Roman army and the Roman losses were more significant than those of Pyrrhus. The bad news is that Pyrrhus lost so many men relative to his army, that he was unable to maintain an army after the large number of casualties in the two battles, and he ultimately lost the war to the Romans who had a much larger reserve of men to back fill their losses. A victory accomplished at a huge loss has been known ever since as a Pyrrhic Victory.

As I said, I’m not sure what the right answer is but the same can be said for the Dems who are politicizing and some of the Conservatives who are ideologues. I do know that this issue needs to be given much more serious consideration and analysis than I’ve seen given it thus far. Should the Dems or the ideologues win, I trust that their success will not be remembered as a 21st century Pyrrhic victory.

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